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GM Oshawa closure proof government bailouts dont work: OLeary
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He doesn’t like to say he told you so.
But — when he was running for a chance to be Canada’s next prime minister — Kevin O’Leary warned that when governments use taxpayers’ dollars to prop up failing businesses, all that comes out of it is failure.
Now that General Motors has announced it is closing its historic Oshawa assembly plant, the private businessman and analyst says there is an important lesson to be learned.
“The GM Oshawa plant closing is proof that government bailouts never work and Canadian taxpayers always lose,” the Shark Tank and Dragon’s Den star told the Toronto Sun.
- ‘SHIP HAS ALREADY LEFT’: Horwath accuses Ford of giving up on GM Oshawa
- GM confirms it’s leaving Oshawa plant ‘unallocated’ after 2019
- EDITORIAL: Uphill fight to keep GM auto jobs
- BRAUN: GM closures no surprise to experts
Out of the $4 billion Canada offered in loans, bailouts and stock purchases, most agree it didn’t pay off in the end.
“GM was a poorly managed company that should have been allowed to go bankrupt and restructure,” he said. “Instead, Canadian taxpayers were offered extraordinary returns and long-term jobs. They got neither.”
The proof came Monday with the devastating GM announcement .
When the automaker said in January 2017 it was cutting 600 jobs at the CAMI plant in Ingersoll in favour of a plant in Mexico, O’Leary said the same thing.
“The taxpayer, you and me, paid for this,” he said in a Global TV interview. “We were promised that these jobs would stay in Ontario — they’re not. The government did a hell of a bad job negotiating that deal. Who negotiated that deal? If they worked for me they’d be fired now. You have to be a better manager if you’re going to govern a province as big as Ontario. ”
O’Leary was right. And here we are again.
This time it’s nearly 3,000 jobs and thousands more in spin-off businesses.
And those who are even considering the prospect of throwing more taxpayer money to keep remaining GM jobs, should stop, O’Leary says.
“Next time the government wants to invest in the private sector on your behalf, remember how poor they are as fiduciaries,” he told me. “Governments spend money as if it is not theirs, and it’s not, it’s yours.”
It was heartening to hear Premier Doug Ford stand up in the legislature and say there is no way taxpayers are going to shell out “billions” for another potential bailout.
It has to stop somewhere.
Now I know, thanks to the federal Liberal government’s announced media fund , why journalists get asked about hypocrisy. Such a bailout falls into the same category. There should be no taxpayer money used to save private-sector companies in a free-enterprise system. That said, if the government decides to move forward, any tax money for private media companies channelled through government should come from the $1.2 billion in tax dollars already being spent to prop up the CBC.
In essence the CBC should shrink to about half its size. Perhaps if it did there would be a better business opportunity for private broadcasters and print outlets to compete and not need to lean on public dollars to do so.
But today is about the auto industry and O’Leary raises the excellent point: What’s next?
“Look how badly Trudeau’s investment in the Kinder-Morgan pipeline has gone already,” he said. “Canadian taxpayers just got shafted again for billions.”
The moral of the story?
“This country desperately needs better management,” said O’Leary.
And that starts by not letting government give any more tax dollars to companies wanting a public bailout.
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